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2 FTSE 100 dividend stocks yielding over 4% I’d buy for my ISA today

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While the FTSE 100’s dividend yield of 4% may be highly appealing, it is possible to obtain a higher yield from some of the index’s incumbents.

In fact, there are a range of companies operating in a variety of industries that currently yield over 4%. Buying them now could lead to impressive income returns in the long run – especially since many of them trade on fair valuations and offer the potential to deliver rising dividends in the long run.

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With that in mind, here are two FTSE 100 dividend stocks that may be worth buying today.

Micro Focus

International software product company Micro Focus (LSE: MCRO) released a positive trading update on Thursday. The business is trading in line with previous guidance, and expects to report interim results that are in line with expectations.

Encouragingly, the collection of aged trade receivables has continued in line with management expectations. It expects its constant currency revenue range for the full year to be between minus 4% and minus 6% when compared to the previous year.

While the company has experienced a challenging period over recent years, it seems to be recovering well under a refreshed strategy. It currently has a dividend yield of 4.3%, which could increase at a brisk pace over the long run as its current strategy is implemented. It has dividend cover of 2, which suggests that a higher dividend could be affordable without putting pressure on the company’s financial standing.

With Micro Focus shares trading on a price-to-earnings (P/E) ratio of 12, they seem to offer good value for money compared to other FTSE 100 companies. As such, now could be a good time to buy them, with there being the potential for a high income return as well as capital growth over the long run.

Admiral

The performance of motor insurance specialist Admiral (LSE: ADM) in recent years has been impressive. The company has been able to raise dividends per share at an annualised rate of 23% over the last three years, and they are expected to rise by a further 23% in the current year.

This puts the stock on a forward dividend yield of 6.4%. Although its payout is made up of ordinary and special dividends, which means it may be less robust than other FTSE 100 dividend stocks, its track record of keeping costs down and offering highly competitive pricing to customers could mean that its prospects are highly attractive.

With Admiral set to benefit from possible changes to the Ogden discount rate on personal injury claims, its bottom line could deliver improved performance over the long run. Although the stock trades on a relatively high P/E ratio of 16 at a time when some FTSE 100 stocks have much lower valuations, its consistent financial performance and the potential for a rising dividend could mean that it is worth buying at the present time.

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Peter Stephens owns shares of Admiral Group and Micro Focus. The Motley Fool UK has recommended Micro Focus. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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